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TMI Blog2022 (11) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant. It is submitted that the addition so incorrectly and illegally made be deleted. 2. The learned CIT (Appeal) has erred in disregarding the evidences and materials filed clearly showing that the amount of Rs. 7,44,14,182/- were received by the appellant trust as donation to the corpus, were directly credited to the trust fund and was never in the nature of income as per past consistent practice followed and accepted by the income tax dept. It is submitted that the same be so held now and the addition of Rs.7,44,14,182/- made as income of the appellant trust be deleted. 3. The order passed by the learned Commissioner of Income-tax (Appeals) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now. 4. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing of appeal." 3. The brief facts of the case are that during the course of assessment proceedings it was observed that the Assessee had received corpus donationon which exemption was claimed under Section 11(1)(d) of the Act. The Assessee was required to explain the nature of the corpus donations and to expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations of DURDA that it would be collecting Cess from the members. This Cess is to be treated as Corpus Donation. Since the Cess is linked to the Quantity of Milk fat supplied, the payer has no choice or option to alter the amount of Cess it is required to pay. The fact that this Cess is treated as Corpus Donation is not known to the payer except when a letter to this effect is obtained by DURDA from the un-suspecting Donor MSS as a matter of routine. MDCMPUL keeps a pre-printed format wherein only the name of the payer Mandli, its code Number, Taluka and Amount is left blank to be filled at the time of receiving the Cess amount. The Corpus as understood, is the capital of an Assessee, a capital of a society, a capital of a trust, a capital of aninstitution.Adonation would qualify as corpus donation if the following three conditions are satisfied cumulatively: a. The receipt is in the nature of donation b. The donation is made voluntarily c. The donor gives a specific direction that the donation is for the corpus. 5. The Ld. Assessing Officer observed that in the instant facts Assessee has received cess from the members, against the sales made by Donor MSS to MDCMPUL, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There was no specific direction from the Donor MSS. 6. In view of above the Ld. Assessing Officer disallowed Assessee's claim that Rs. 7,44,14,182/-be treated as corpus donation under Section 11(1)(d) of the Act. 7. In appeal, Ld. CIT(A) dismissed the assessee's appeal on this issue, with the following observations: "18. After going through the assessment order where this issue has been discussed in detail, the submission of the appellant as well as the objects of the appellant trust, I find that the appellant itself has stated that the corpus income that is being received by it is in the nature of "fees" collected from milk societies. The appellant takes the contribution from milk suppliers @ Rs.2/- per kilo fat for the milk supplied to it by each society. On the basis of such receipts, the appellant provides services to these societies in the form of maintenance of good quality of milk animals and other medical benefits, Therefore, it is very clear that the said 'donation' is made by the milk societies in lieu of certain services that the appellant gives them in exchange for this fees. Therefore, the contribution cannot be said to be voluntary. A voluntary contribution is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the mere fact that it is linked to production of milk cannot lead to the conclusion that it is not voluntary. He submitted that the members themselves have "voluntarily" decided to give contribution to the assessee. The methodology of linking corpus donation to the production of milk has been adopted and agreed to by the "Members" as and the assessee has not adopted the methodology. Accordingly, the donation qualifies as "Corpus donation" eligible for exemption was claimed under Section 11(1)(d) of the Act. 9. In response, Ld. Departmental Representative invited our attention to page 12/42 of Paper-Book to submit that clearly the donation is not "Voluntary" and therefore donation does not qualify as "Corpus donation" eligible for exemption was claimed under Section 11(1)(d) of the Act. The Ld. Departmental Representative submitted that the resolution to collect additional donation has been has been decided by the assessee itself with no discretion of the Donors. Accordingly, donation does qualify as "Corpus donation" eligible for exemption was claimed under Section 11(1)(d) of the Act. 10. We have heard the rival contentions and perused the material on record. It would be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of admission to the privileges and benefits of the society or institution are given under a contract and are not voluntary. The Delhi High Court in the case of DivineLightMission[2005] 146 Taxman 653 (Delhi) held that membership fee and subscription amounts received by trust/society from its members cannot be characterized as voluntary contribution within meaning of expression 'fund' in Section 12. While holding so, High Court made the following observations: "Voluntary contribution is an act not coupled with compulsion. One may contribute or one may not contribute. Therefore, it is rightly said that it is in the nature of a gift. But so far as subscription is concerned, it is with some compulsion. If one wants to become a member of a trust and if he is required to pay subscription, as in the instant case, then it amounts to compulsion." 12. Again, the Bombay High Court in the case of CIT v Gem & Jewellery Export Promotion Council[1983] 13 Taxman 13 (Bombay)/[1983] 143 ITR 579 (Bombay), on the nature of voluntary contributions: It was well known that the grants-in-aid were made by the Government to provide certain institutions with sufficient funds to carry on their char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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